KALAMAZOO, MI -- A $44 million hotel project in downtown Kalamazoo received millions of dollars in funding from the state of Michigan.

The Michigan Strategic Fund approved $3.4 million in local and school tax capture and a $7.45 million Michigan Community Revitalization Program performance-based loan Tuesday. PlazaCorp Realty Advisors Inc., under the name Kzoo Hotel Partners LLC, plans to redevelop the historic six-story Rose Street Market building and an adjacent surface parking lot into a 118-room Hilton Garden Inn boutique hotel and 107-room extended stay Home2 Suites by Hilton.

The buildings are expected to total 153,500 square feet, including 15,000 square feet of office space an indoor pool and an elevated walkway across Eleanor Street. The project is expected to create 75 jobs, and add vibrancy and density to downtown Kalamazoo, according to a release from the MSF.

“Without Michigan Strategic Fund incentives and financing, many extraordinary historic redevelopment projects would not happen,” said Andy Wenzel, PlazaCorp director of acquisitions and development. “We look forward to continuing to bring new and refreshing projects that transform our community.”

The vacant Rose Street Market building was built at 303 N. Rose St. more than a century ago as the location of a Masonic Temple and more recently housed various commercial uses.

City of Kalamazoo brownfield documents show property taxes would be collected to reimburse lead and asbestos abatement, demolition, site preparation, infrastructure improvements and other eligible work. The state signed off on tax capture sought by the city’s brownfield authority to reimburse Kzoo Hotel Partners LLC for remediation efforts during the next 16 years.

PlazaCorp Realty Advisors Inc. plans to invest $44 million to redevelop the Rose Street Market building and an adjacent parking lot into two buildings totaling 153,500 square feet. (Rendering provided by PlazaCorp)

The developer expects the hotel will act as a catalyst for new development and growth in the northwest quadrant of downtown. The project is a few blocks north of the Radisson Plaza Hotel and $70 million Exchange Building, which is currently under construction.

PlazaCorp is planning other projects in the Arcadia Commons West section of downtown, including residential units, office and retail space and a second hotel in 2021. No new details have been released during the last year.

A 2016 W.E. Upjohn Institute for Employment Research study paid for by PlazaCorp determined the projects would create demand for 517 full-time and temporary jobs and add $24.44 million in personal income by 2021 in Kalamazoo and Van Buren counties.

The project is a few blocks north of the Radisson Plaza Hotel and $70 million Exchange Building, which is currently under construction.